Some reactions etc.
Niall O’Connor, technical strategist at JPMorgan
- maintained that the clear-cut break of $1.3477 “should confirm the deteriorating medium term setup particularly following the bearish reversal in May with deeper targets near $1.3400-1.3295.”
- The euro bottomed around $1.3400 November 21, 2013 and $1.3296 November 7, 2013.
On the topside, “the $1.3552-75 area should now maintain the more immediate downside bias,” O’Connor said.
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Bob Lynch, senior currency strategist at HSBC:
- The pair, “has persistently been trading in the lower portion” of the $1.3500 to $1.3700 range seen since the June ECB meeting, “really since May,”
- The latest break of key euro support levels has the market becoming bearish and more willing to try a short position, he said.
“Lots of people are looking at these levels, so it’s important to see followthrough selling,” - This month, the euro has not responded much to geopolitics, fundamentals, economic data and or central bank action. with nothing, up until today, “generating much volatility in FX,”
- “The longer the euro stays in this (sub $1.3500) area, it would suggest a more bearish bias than not in the currency,”
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Credit Agricole :
- “In the month ahead, we expect the euro to be more resilient to carry pressures versus the dollar,”
- “This resilience will be facilitated by ongoing capital inflows into European bond markets and a rebound in relative equity performance,”
- While Credit Agricole continued to see these drivers turning against the euro in Q4, “an earlier move seems premature,”
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via MNI
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Also, this from Nomura before it broke down:
Turnover is very low as the lack of data and a slow drift to the summer holidays takes the FX by storm (or the opposite of storm, whatever that is). I still favour the resolution lower and US CPI will today dictate the strategy as to how we get there. A strong number and we have a go at 1.3490 again. A break below 1.3475 should not be faded. A weak number and there is a risk of a squeeze but you sell that rally around 1.3565 (with a stop @ 1.3620). There is still very much the risk of a squeeze so I am in nimble mode.
Still a bearish set-up for EUR and I include the Ichimoku chart here as, by pure coincidence, it defines the levels to sell on the topside (with the baseline and conversion line) as well as the s/l being the base of the cloud (1.3614 at the moment).
